Uber Technology Inc.is an integrated corporation operating in about 600 cities in over 50 different countries. The company has registered significant growth over a short period but is currently facing profit-related challenges. However, through restructuring and strategic planning, in line with the internal and external factors as well as market diversity, the company will benefit from the existing markets gaps and opportunities.
Overview of the IndustryThe transport, logistics, and delivery sector in the United States are one of the most advancing sectors of the economy in the country. The industry is highly competitive with most international firms positioning themselves in the market through extended coverage and international presence. The focus of the sector is to facilitate the flow of goods, people, and services across major destinations (SelectUSA, 2016). The existence of large consumer markets and emerging economies is a factor that has facilitated the level of growth in the industry. Profit levels associated with the sector does not entirely rely on the internal environment factors related to the United States. The effect of globalization and trade interconnectedness has contributed to the demand for transport, logistics, and delivery of goods and services as well as the movement of people across various destinations. The benefits in the industry emanate from a highly experienced and enterprising workforce, and a corresponding relatively reduced costs of operation as well as limited regulatory burdens (SelectUSA, 2016). A well-established physical and technical infrastructure from the baseline for the competitiveness, efficiency, and sustainability levels enjoyed by investors. However, such an enabling environment in the industry does not affirm the absence of corporate challenges and risks.
Impact on IndustryThe entry of Uber and other similar investors in the industry provided a new dimension in the sector. The initial consideration regarding transport and logistics majored in large-scale investments and cargo transport with little regard to technology-based small-scale deliveries within a short distance. In 2009, Uber Technologies Inc. introduced a new dimension to taxi business where customers inquired for transport and delivery of food and other goods through a mobile application (Uber, 2016). The use of technology in taxi business was a new shift for the industry that awakened the need for convenience and efficient customer service. The firm brought together the drivers willing to offer the intercity transport services and brought a different approach to taxi business in the United States where the firm does not own the vehicles directly but connect customers to drivers through the developed application platform. Therefore, the existence of operators such as Uber Technologies Inc. and other similar firms generated the existence of an on-demand ridesharing subsector within the transport, logistics, and delivery industry. Moreover, the entry of Uber in the business showed the essence of small-scale deliveries as another form of investment with a diversified, competitive advantage. Focusing on the customer needs in line with the ease of use, accessibility, and lower prices, the organizations have managed to enhance the level of competition in the sector since the market approach is almost similar for most of the firms.
The existence of different investors within a particular corporate niche creates competition. The level of competitiveness depends on the number of enterprises operating in the industry, the nature of the market, the resources available for organizations, and other external factors. The transport sector in the United States is characterized by stiff competition from a different organization. When we consider Uber Technologies Inc., we can narrow down to the on-demand ridesharing operators in the United States and globally (Juggernaut, 2015). The firms that operate the app-based pooling of willing drivers and customers seeking transport and delivery services have been increasing based on the lucrative nature of the business.
Uber and Flywheel were among the earliest entrants in the subsector tracing their launch back in 2009. Other firms have joined the business such that the estimated overall income is currently at an average of $8.2 billion in corporate funding (Juggernaut, 2015). Lyft Company was established in 2012 in San Francisco, CA. The organization is operating as a private and late-stage status firm. The total funding for Lyft Company stands at $1.01 billion with the top investors are Mayfield Fund, Floodgate, and K9 Ventures. Another competitor, who also joined the market in 2012, is the Sidecar Company. The firm is also located in San Francisco, CA operating as a private company with a series C status (Sekar, 2016). The total operating income of the business is relatively low at $35 million. Union Ventures, Avalon Ventures, Lightspeed Partners, and Google Ventures are part of Sidecar Company investors. On the other hand, Hailo Inc. was started in 2011 in New York, NY and is operating as a Series C private firm. With an operating income of over $100.6 million, the firm is committed to growth and customer service in the subsector. Union Square Ventures and Wellington Partners are some of the top investors associated with Hailo Inc. other competitors operating as an on-demand ridesharing business include the Flywheel Company and Gett Inc. (Sekar, 2016).
Worth noting is that Uber Technologies Inc. is also facing another dimension of competition emanating from ordinary taxi operators who are not registered to any on-demand ridesharing platform. The group of taxi drivers existing as individual operators or incorporated organization formed the initial investors in the business. However, the changing customer needs such as availability, low prices, and flexibility created the gap in the market. Firms such as Uber Technologies Inc. and Flywheel started the application-based ridesharing form of taxi business in the country (Sekar, 2016). Nevertheless, the regular taxi operators still control a significant market share that poses a high sustainability threats for Uber Technologies Inc., which has contributed to a series of legal suits in different countries whenever the firm expands its market at various cities.
Business Effect on the IndustryThe introduction of the on-demand ridesharing subsector in the transport, logistics, and delivery industry in the country offered a new dimension for the corporate investment in the taxi business. More firms and stakeholders have been attracted to invest in the company, which has created a high-level competition across different geographical markets. The need to sustain the level of net income from linking the customers to the registered drivers whenever they need taxi services has been subjected to critical challenges. Uber Technologies Inc. has positioned itself strategically in the market with over $50 billion operating income (Juggernaut, 2015; Sekar, 2016). However, the effect of legal tussle emanating from the regular taxi operators and collaboration conflicts with registered drivers is a major risk that is facing the firm and other investors. The level of customer service stands as a yardstick for measuring the efficiency of the services provided. Nevertheless, the success of subsector, as well as the individual firms, depends on the integration of a business model that will guarantee a fair deal for both the registers drivers and the investors in line with the long-term anticipations.
Background of OrganizationUber Technologies Inc. was started in 2009 as an online-based company within the transport, logistics, and delivery sector. The companys head office is located in San Francisco, California in the United States but operates in more than 500 major cities across the globe. The mode of operation of the organization is unique such that the firm is responsible for developing, marketing, and operating the mobile-based application where potential registered drivers offer transport services to customers through the integrated platform. People seeking transport services can inquire through the mobile app where they are connected to a ride within their location. The firm also operates a website that works in a similar manner as the application and clients can book a ride through the web. Therefore, Uber Technologies Inc. can be viewed as a shared economy business model, which allows registered drivers to use personal or rented cars to get additional income as full-time or part-time Uber workers (Henten & Windekilde, 2016).
The idea of on-demand ride sharing was established when Garret Camp and Travis Kalanick developed the venture from a simple business idea, which was based on the need to reduce the cost of hiring expensive black cars in the country. Therefore, the organization started in 2009 as UberCab by initially developing the application and the website that could integrate the customers and the willing drivers. The first market of operation was San Francisco after a mega launch in 2011 under the new name Uber (Juggernaut, 2015). The firm then enhanced their operations by integrating the Uber Garage service where customers could now hire regular taxi services. By 2012, only selected drivers recruited by the company were allowed to offer transport services. Later, in the same year, the organization included the option of open ridesharing to allow anybody with a car to offer transport services under the on-demand basis. The move saw the reduction of the regular taxi charges, which attracted more customers. Therefore, more drivers joined the firm, and the level of competition in taxi business started to intensify.
By 2014, Uber Technologies Inc. introduced food and package delivery making the firm a more diversified transport service provision company in the United States. Currently, the company is operating in over 500 cities across the world with an aggressive approach to the market (Juggernaut, 2015). For example, the firm has different cab models that allow the customers to have a range of choices such as Uber X, Uber Black, Uber SUV, and Uber Taxi. Moreover, the price of the services depends on the situation and is determined using the surge pricing technology. The diversified needs of the customer have enabled the management to consider a different approach to transport and delivery. The company is not restricted to cabs only but operates boats and helicopters on demand. One of the most remarkable inventions of customer service is the introduction of motorcycle-pickup transport in Paris. The type of services is not unified to all cities but depends on the market culture and the geographical fact...
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